(Indian) Venture Funds Race to Raise Fresh Capital

Wednesday, May 11, 2011

BANGALORE — Aavishkaar India, an early-stage venture capital firm, will complete raising a $120 million in June for its fourth and largest fund.

The size and speed of Aavishkaar’s fund-raising effort — six months to close a fund — reflect the hurry venture capitalists are into make new investments, taking a cue from their more active private equity investors. There are at least half a dozen other venture-capital firms that are either raising funds or increasing the size of their funds.

Another impetus for this hectic activity is that it’s almost time many venture capitalists exit their current investments. Typically, VCs begin raising fresh capital after committing at least 70% of their existing funds toward fresh investments. For instance, Clearstone Venture will also raise its third fund this year with a corpus of $215 million as it’s nearing the end of its investment cycle.

Others, though, want to grab at fresh opportunities.

TVS Capital Funds Ltd., the asset-management venture of TVS Group and Shriram Group, is looking to raise its second fund, two people with knowledge of the matter said. The firm expects to secure internal approvals for the fund at its board meeting later in May, said a senior executive at TVS Capital. The fund size will be about $100 million and the money will be used to invest in infrastructure services.